{"id":140355,"date":"2025-06-03T09:15:20","date_gmt":"2025-06-03T06:15:20","guid":{"rendered":"https:\/\/tietopankki.crnet.fi\/fi\/news\/where-in-europe-are-workers-losing-ground-as-taxes-rise-faster-than-wages\/"},"modified":"2025-06-03T09:15:20","modified_gmt":"2025-06-03T06:15:20","slug":"where-in-europe-are-workers-losing-ground-as-taxes-rise-faster-than-wages","status":"publish","type":"post","link":"https:\/\/tietopankki.crnet.fi\/fi\/news\/where-in-europe-are-workers-losing-ground-as-taxes-rise-faster-than-wages\/","title":{"rendered":"Where in Europe are workers losing ground as taxes rise faster than wages?"},"content":{"rendered":"<div class=\"mp_wrapper\">\n  <div class=\"mepr-unauthorized-message\">\n    <p>You are unauthorized to view this page.<\/p>\n  <\/div>\n  <div class=\"mepr-login-form-wrap\">\n            \n<div class=\"mp_wrapper mp_login_form\">\n                  <!-- mp-login-form-start -->     <form name=\"mepr_loginform\" id=\"mepr_loginform\" class=\"mepr-form\" action=\"https:\/\/tietopankki.crnet.fi\/fi\/login-2\/\" method=\"post\">\n            <div class=\"mp-form-row mepr_username\">\n        <div class=\"mp-form-label\">\n                              <label for=\"user_login\">Username<\/label>\n        <\/div>\n        <input type=\"text\" name=\"log\" id=\"user_login\" value=\"\" \/>\n      <\/div>\n      <div class=\"mp-form-row mepr_password\">\n        <div class=\"mp-form-label\">\n          <label for=\"user_pass\">Password<\/label>\n          <div class=\"mp-hide-pw\">\n            <input type=\"password\" name=\"pwd\" id=\"user_pass\" value=\"\" \/>\n            <button type=\"button\" class=\"button mp-hide-pw hide-if-no-js\" data-toggle=\"0\" aria-label=\"Show password\">\n              <span class=\"dashicons dashicons-visibility\" aria-hidden=\"true\"><\/span>\n            <\/button>\n          <\/div>\n        <\/div>\n      <\/div>\n            <div>\n        <label><input name=\"rememberme\" type=\"checkbox\" id=\"rememberme\" value=\"forever\" \/> Remember Me<\/label>\n      <\/div>\n      <div class=\"mp-spacer\">&nbsp;<\/div>\n      <div class=\"submit\">\n        <input type=\"submit\" name=\"wp-submit\" id=\"wp-submit\" class=\"button-primary mepr-share-button \" value=\"Log In\" \/>\n        <input type=\"hidden\" name=\"redirect_to\" value=\"\/fi\/wp-json\/wp\/v2\/posts\/140355\" \/>\n        <input type=\"hidden\" name=\"mepr_process_login_form\" value=\"true\" \/>\n        <input type=\"hidden\" name=\"mepr_is_login_page\" value=\"false\" \/>\n      <\/div>\n    <\/form>\n    <div class=\"mp-spacer\">&nbsp;<\/div>\n    <div class=\"mepr-login-actions\">\n        <a\n          href=\"https:\/\/tietopankki.crnet.fi\/fi\/login-2\/?action=forgot_password\"\n          title=\"Click here to reset your password\"\n        >\n          Forgot Password        <\/a>\n    <\/div>\n\n      \n    <!-- mp-login-form-end --> \n  <\/div>\n      <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<div class=\"smart_content_wrapper\">\n<p>White did taxes rise faster than real wages in Europe? While most European countries experienced higher real post-tax incomes in 2024, some saw a decline, as rises in personal average tax rates outpaced real wage growth. Among the 27 European countries covered in the OECD\u2019s Taxing Wages 2025 report, seven recorded a decline in real post-tax income in 2024 compared to 2023 for the average single worker without children.\u00a0This measure reflects the amount of money left to spend or save after taxes are deducted and inflation is taken into account. The countries affected were Italy, Estonia, Czechia, France, Greece, Belgium, and Spain.<\/p>\n<p><em>Why did people take home less money in these countries?<\/em><br \/>\nIn Italy, the average wage increased by 3.9% in 2024. With inflation at 1.2%, this translated to a real wage growth of 2.7% before taxes. However, the personal average tax rate\u2014which includes both personal income tax and employee social security contributions\u2014rose sharply by 7.5%. This created a significant gap between real wage growth and the increase in personal taxation, ultimately eroding much of the benefit from higher wages. Cristina Enache, global tax economist at the Tax Foundation, emphasised the impact of increased social security contributions.<\/p>\n<p>While this highlights a growing gap between wages and taxation, it doesn\u2019t directly reveal how much real post-tax income changed. Personal average tax rates also increased by more than 4.5% in Estonia and Czechia, leading to lower real post-tax incomes in 2024, as real wage growth did not keep pace.<\/p>\n<p>Enache of the Tax Foundation noted that in Estonia, the tax burden rise was driven by the removal of certain tax allowances. In Czechia, the increase was primarily due to higher social security contributions from either employees or employers. In France, real wages grew by 0.7%, but the personal average tax rate increased by 1.7%, resulting in lower real post-tax incomes compared to 2023.<\/p>\n<p><em>Portugal, UK and Turkey record highest increases<\/em><br \/>\nDuring this period, Portugal, the UK, and Turkey recorded the highest increases in real post-tax incomes. In Portugal, the personal average tax rate fell by 8%, while real wages grew by 4.7%. \u201cPortugal reduced its income tax rates for the first six tax brackets, reducing the overall tax wedge for the average income earner,\u201d Cristina Enache told Euronews.<\/p>\n<p>In the UK, the average tax rate dropped by 8.7%, although real wage growth was modest at 1.6%. In Turkey, despite a 3.9% increase in the personal average tax rate, a substantial 15.5% rise in real wages led to significantly higher real post-tax incomes in 2024 compared to 2023. However, some critics have accused the national statistical office of manipulating inflation figures.<\/p>\n<p><em>What does a lower or higher \u201creal post-tax income\u201d indicate?<\/em><br \/>\nCristina Enache explained that &#8221;real post-tax income&#8221; refers to the income a person takes home after taxes, adjusted for inflation. \u201cA lower real post-tax income means that after taxes and inflation, the individual has less money to spend. Therefore, a decrease in the real post-tax income between 2023 and 2024 means that the worker earning the average wage is losing purchasing power,\u201d she said.<\/p>\n<p><em>Policy recommendation for &#8217;bracket creep&#8217;<\/em><br \/>\n&#8217;Bracket creep&#8217; occurs when income growth causes individuals to pay higher average income tax rates over time. This typically happens when inflation pushes taxpayers into higher tax brackets or erodes the value of tax credits, deductions, and exemptions. According to the Tax Foundation, \u2018bracket creep\u2019 leads to higher income taxes without any real increase in income.<\/p>\n<p>\u201cIndexing the income tax (and, depending on the design, the social security contributions) to inflation would avoid bracket creep and could mitigate the decrease in real post-tax income for workers,\u201d Enache pointed out.\u00a0The Euronews article titled \u201cWhere did real wages rise and fall the most in Europe in 2024?\u201d takes a closer look at how wages changed compared to 2023\u2014examining nominal increases, inflation, real wage growth, and average salaries.<\/p>\n<p>Source: <a rel=\"noopener\" href=\"https:\/\/www.euronews.com\/business\/2025\/06\/03\/where-in-europe-are-workers-losing-ground-as-taxes-rise-faster-than-wages\">Euronews<\/a><\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<p>The post <a rel=\"noopener\" href=\"https:\/\/vastuullisuusuutiset.fi\/fi\/vau-viikkokatsaus\/where-in-europe-are-workers-losing-ground-as-taxes-rise-faster-than-wages\/\">Where in Europe are workers losing ground as taxes rise faster than wages?<\/a> appeared first on <a rel=\"noopener\" href=\"https:\/\/vastuullisuusuutiset.fi\/fi\">Vastuullisuusuutiset.fi<\/a>.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22],"tags":[696,1812,606,607,608,1023],"class_list":["post-140355","post","type-post","status-publish","format-standard","hentry","category-news","tag-europe","tag-tax","tag-vau_viikkokatsaus","tag-vauen","tag-vaufien","tag-worker"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/posts\/140355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/comments?post=140355"}],"version-history":[{"count":0,"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/posts\/140355\/revisions"}],"wp:attachment":[{"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/media?parent=140355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/categories?post=140355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tietopankki.crnet.fi\/fi\/wp-json\/wp\/v2\/tags?post=140355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}